Online FOREX Currency Trading
FOREX Trading Strategy : An Easy Forex Trading Strategy
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FOREX Trading Strategy
To trade successfully, you need a strategy. Having a strategy does not guarantee success, but not having ine will almost certainly guarantee failure.
There are as many strategies as there are traders, and to be successful you will need to develop your own strategy; ie one that suits, and works for, you.
Take advantage of broker's free demo accounts. Spend as long as you like honing your strategy until it is consistently profitable enough to trade for real.
Keep a journal of your trades (demo and real). Try to analyse why each trade was successful, or not. Be prepared to modify your strategy in the light of your findings.
Trading strategies are based on either fundamental analysis, or technical analysis, or a combination of both.
Fundamental analysis looks at economic data such as trade deficit (or surplus), interest rates, unemployment, inflation, GDP etc. FOREX traders watch for the specific timing of when these figures are released or other key economic announcements are made concerning the currencies they trade.
The problem for the small trader is that the market in the form of institutional traders will already have access to and have discounted everything that you know before you knew it. This doesn't absolve the small trader from the need to know what’s happening in the global economy, indeed it's very important to know why markets are moving as they are, but it does mean that keeping on top of fundamentals alone is unlikely to yield consistent profit.
Technical analysis tries to predict the movement of markets based upon patterns displayed in historical data. There is much skepticism over the value of this technique to predict stock markets, but it is widely used in FOREX trading (alongside fundamental analysis) and thus may be of value in short term trading by virtue of the self-fulfilling prophecy principle.
An Easy FOREX Strategy
A common strategy adopted by the small trader is to wait for economic announcements such as statistics, interest rates etc, and to trade in light of the resulting trend, which may last from a few seconds to a few days. Such trends result from the differences between market expectation and the actual expectation.
The tendency of markets to overreact to deviations from expectation may also be exploited. Good news always drives prices too high followed by a correction. Bad news causes the reverse.
There are numerous "systems" that will produce buy/sell indicators. Many of these will be offered automatically by your online trading platform. Try these out, preferably in demo mode, to find which is most successful under various conditions. But any documented system is probably already being applied by a computer somewhere, and thus losing its potency. To be a consistently successful trader you need to develop an 'X' factor, an intuitive approach that defies quantification.
On the Web
OANDA.com Provides currency and foreign exchange rates to investors travelers and online businesses
FXstreet.com Leading independent portal dedicated to the Foreign Exchange (Forex) market. Latest Forex news, economic calendar, rates & charts, education, resources, brokers...
FXstreet.com Rate History Tool Get up to 365 days of historical data for all of the world's currency pairs.
Daily FX Currency Trading News, Calendar, Charts, Forum...
Forexnews.com Offers the latest insights and analysis in currency markets, freely available to traders and researchers alike.
MoneyTec Traders Community Forum An online trader’s forum discussion group that promotes a mature, intelligent & respectful discussion in a positive & safe environment for everyone.
Go Forex A beginners guide and introduction to forex trading with a currency trading directory for the foreign exchange market.
Forex Factory features user-friendly Forex forums, an advanced Forex calendar, and trading analysis from top sources.
Global-View The Forex Portal Free foreign exchange forums & tools for currency trading, real-time fx rates and more.
Free Guide to FX from UK broker Hargreaves Lansdown Foreign Exchange.
Forex Trading - Foreign Exchange Trading, Forex Analysis and Forecasts.